About Miramar Based in Hong Kong, Miramar Hotel and Investment Company, Limited (Miramar Group) was established in 1957 and has been listed on the Hong Kong Stock Exchange since 1970 (HKEx Stock Code: 71). Miramar Group is a member of Henderson Land Group, and builds a diversified business portfolio to include hotels and serviced apartments, property investment, food and beverage, retail and travel services in Hong Kong, mainland China and the United States. Contents 2 Milestones 4 Financial Highlights 6 Chairman’s Statement 9 Managing Director’s Message 22 Award Recognition 24 Biographical Details of Directors and Senior Management 30 Corporate Governance Report 36 Report of the Directors 64 Independent Auditor’s Report 66 Consolidated Income Statement 67 Consolidated Statement of Comprehensive Income 68 Consolidated Balance Sheet 70 Balance Sheet 71 Consolidated Statement of Changes in Equity 72 Consolidated Cash Flow Statement 74 Notes to the Financial Statements 137 Group’s Five-year Financial Summary 138 Group Properties 141 Notice of Annual General Meeting 144 Corporate Information 1 Miramar Hotel and Investment Company, Limited Annual Report 2011 Milestones 2011 The Group launched Hide-Chan Ramen, Assaggio Trattoria Italiana and Saboten Japanese Cutlet during the first half of the year. Tsui Hang Village in both Central and Tsimshatsui also unveiled new contemporary looks having been revamped in May and July. In September, the first Cuisine Cuisine in the Mainland was launched, bringing Michelin-starred Cantonese cuisine to Greater China. The Group has also expanded into the retail sector, has operated and established franchisee outlets in the major cities of Mainland China. 2010 2006 The iconic Yunyan Sichuan Restaurant Miramar Travel is reopened with a new image in June. incorporated and the The shopping centre at The Mira also interior refurbishment of the underwent renovations as part of brand Miramar Shopping Centre is revitalisation, whilst renovation was completed. Mr. Lee Ka Shing completed for Miramar Shopping Centre. is appointed Managing Director by the Board of Directors. 2008/09 1993 Hotel Miramar, after extensive Henderson Land Group renovations, is re-branded The Mira Hong becomes the Group’s major Kong, an upscale, design-driven, lifestyle shareholder. urban retreat for business and leisure travellers. 2 Miramar Hotel and Investment Company, Limited Annual Report 2011 Milestones 1988 1973 Three old hotel buildings are Tsui Hang Village Restaurant demolished and on its site, the begins operating. Miramar Shopping Centre and Miramar Tower are developed. 1986 1970 Miramar Express is incorporated. Miramar Hotel and Investment Company, Limited is listed on the Hong Kong Stock Exchange. 1983 1966 The Group expands into the Hotel Miramar becomes the first China market, taking a 25 per cent hotel in Hong Kong to join an stake in the first five-star hotel in international hotel network. Shekou. 1978 1957 Hotel Miramar expands its Miramar Hotel and Investment capacity to 1,330 rooms, including Company, Limited is established a 26,000 square-foot penthouse. It after its leaders, Dr. Ho Sien Heng is the biggest hotel in Hong Kong and Mr. Young Chi Wan, purchase and Southeast Asia. the 192-room Hotel Miramar Hong Kong from a Spanish mission. 3 Miramar Hotel and Investment Company, Limited Annual Report 2011 Financial Highlights For the year ended 31 December 2011 2010 HK$’million HK$’million Turnover Property investment 566 494 Property development and sales 45 3 Hotel ownership and management 534 429 Food and beverage operation 228 202 Travel operation 1,055 984 Apparel operation 68 – Total turnover 2,496 2,112 Profit attributable to shareholders of the Company 1,325 784 Underlying profit attributable to shareholders of the Company (note) 411 378 HK$ HK$ Earnings per share 2.30 1.36 Underlying earnings per share 0.71 0.65 Dividend per share 0.38 0.37 At 31 December 2011 2010 HK$’million HK$’million Consolidated net assets attributable to shareholders of the Company 9,907 8,761 HK$ HK$ Consolidated net asset value per share 17.35 15.36 Note: The effect of the net increase/decrease in fair value of investment properties (net of deferred tax and non-controlling interests) was excluded in the calculation of the underlying profit attributable to shareholders of the Company. 4 Miramar Hotel and Investment Company, Limited Annual Report 2011 Financial Highlights Turnover Underlying profit attributable to HK$ million shareholders of the Company 2,496 HK$ million 2,500 600 2,112 2,000 1,616 1,588 411 400 378 1,500 1,303 334 276 1,000 200 152 500 year/period year/period 0 ended 0 ended 31 March 31 March 31 31 31 31 March 31 March 31 31 31 2008 2009 December December December 2008 2009 December December December 2009 2010 2011 2009 2010 2011 Underlying earnings per share Dividend per share HK$ HK$ 1 1 0.71 0.65 0.58 0.48 0.5 0.5 Notes: 0.39 0.37 0.38 0.32 0.26 0.23 (1) In August 2009, the Company changed its financial year end date from 31 March to 31 December. year/period year/period Hence the figures for the period 0 0 31 March 31 March 31 31 31 ended 31 March 31 March 31 31 31 ended ended 31 December 2009 covered 2008 2009 December December December 2008 2009 December December December the nine months period from 1 April 2009 2010 2011 2009 2010 2011 2009 to 31 December 2009. Shareholders’ equity Net asset value per share (2) The figures for the period ended 31 HK$ million HK$ 9,907 December 2009 and year ended 31 10,000 20 March 2009 have been restated to 8,761 17.35 reflect the effect of early adoption 7,997 8,102 of the amendments to HKAS 12, 8,000 15.36 7,035 15 13.99 14.18 Income taxes, in 2010. The figures 12.32 for the year ended 31 March 2008 6,000 have not been restated as it would 10 involve delays and expenses out of proportion of the benefit to 4,000 shareholders of the Company. 5 2,000 0 year/period year/period ended 0 ended 31 March 31 March 31 31 31 31 March 31 March 31 31 31 2008 2009 December December December 2008 2009 December December December (restated) 2009 2010 2011 (restated) 2009 2010 2011 (restated) (restated) 5 Miramar Hotel and Investment Company, Limited Annual Report 2011 Chairman’s Statement Harness Opportunities to Excel in the Future 6 Miramar Hotel and Investment Company, Limited Annual Report 2011 Chairman’s Statement For the financial year ended 31 During the year, the Group’s core CORPORate GOVERNANCE December 2011, the Group’s businesses recorded satisfactory AND SOCIAL RESPONSIBILITY turnover amounted to approximately performance and overall results HK$2,496,000,000, representing grew year-on-year. Operating profit The Group places substantial an increase of 18% as compared of The Mira Hong Kong (The “Mira”), importance on corporate governance with 2010. Profit attributable to the Group’s flagship hotel, improved and considers contributing to the shareholders posted a growth of 69% significantly and EBITDA (earnings well-being of society as our corporate to approximately HK$1,325,000,000 before interest, taxes, depreciation and responsibility. During the year, the (2010: HK$784,000,000). Excluding amortisation) delivered an impressive Group continued to uphold its the net increase in the fair value of 52% increment. As for Property Rental unsurpassed corporate governance our investment properties, underlying business, the Group recorded increase standards and actively participated profit attributable to shareholders was in both occupancy rate and average in various charitable and community approximately HK$411,000,000 (2010: unit rate of the property under our events. HK$378,000,000). Basic underlying sound property portfolio. With earnings per share amounted to more renowned brands and quality During the year, the Group adhered to HK$0.71, representing a year-on-year enterprises becoming our tenants after the internationally recognised COSO increase of 9%. the completion of the refurbishment (Committee of Sponsoring Organizations work in the 100,000 sq. ft. shopping of the Treadway Commission) internal BUSINESS OVERVIEW centre at The Mira, we achieved an monitoring standard. By conducting outstanding 15% growth in rental regular Internal Audits, the Group is Benefited from the continued income. committed to ensuring that business economic growth of mainland China operation and management control, and other regions in Asia, visitor arrivals Despite the adverse impact brought among other areas, are in compliance in 2011 hit a record high of 41 million. forth by natural disasters and political with international and professional Visitor spending during the year also instability in certain countries and areas standards. posted an outstanding growth of over around the world, the Group’s Travel 20% year-on-year to an estimated Business remained on an uptrend. As Furthermore, the Group is keen to amount of HK$253 billion in total. This for the newly-developed Apparel Retail take part in community activities helped foster robust development of Business, we are also delighted to and encourages the involvement industry sectors including hotel, food witness robust development in 2011, of fellow staff members. During the and beverage and retail consumption which was in line with the Group’s year, the Group conducted regular in Hong Kong. expectation. visits to community centres for the elderly and participated in fundraising events organised by different charity organisations, so as to provide support to minority groups and to enhance social care. 7 Miramar Hotel and Investment Company, Limited Annual Report 2011 Chairman’s Statement PROSpectS vibrant and modern management. ACKNOWLEDGEMENTS Upon the completion of the renovation Looking ahead, we expect China work of the Group’s hotel, shopping I would like to convey my genuine and Hong Kong to maintain sound centre and office building, the overall gratitude to the fellow members economic growth.